Tamworth power: New England to become renewable energy hub after enormous interconnector upgrade, says Mayor

TransGrid announced on Tuesday the mega upgrade, which is designed to add capacity to the NSW-Queensland interconnector, improve the reliability of the state's grid and drive down prices.

But the project will also mean more billions spent locally in massive renewable energy developments, according to Tamworth Regional Council Mayor Col Murray.

"Absolutely without doubt it will," he said.

"Tamworth will become more of one of those major powerline intersections, where you see that critical national north-south link but importantly into the future the east-west link where the power runs from Tamworth out to places like Gunnedah, Narrabri, Moree.

"It'll consolidate the grid capacity in our city."

Renewable energy developer Adam Blakester believes the region should be looking to take advantage of the energy boon to entice energy-hungry industrial business to relocate to the area.

With good local leadership, the region could become a major industrial powerhouse like the Hunter, central Queensland or parts of Tasmania, he said.

Industrial users can more-or-less halve their electricity costs by hooking into a power plant before the grid - but that's only possible if they're immediately adjacent. In a competitive global export market that's a huge competitive advantage.

"So there is an opportunity for energy intensive industry," he said.

"And I think the other opportunity is that as more projects are developed, and the renewable energy sector grows in our region, the various electrical trades, engineering, computer and other skills that are required to build and operate and maintain these projects, those skills can be used in other industries.

"We do potentially get to a point where we've got a critical mass in capacity in this kind of engineering that can be used for other economic activities. That's the kind of leverage and growth that I think is quite exciting for the region to look at."

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The interconnector upgrade is the first of the Australian Energy Market Operator's planned Integrated System Plan projects to get sign off in what will eventually mean a massive upgrade of power grid capacity across NSW.

The New England has been a designated a renewable energy zone by the state government and is already a major energy exporter to the rest of the state.

Because power transmission capacity is the bottleneck slowing new renewable investment, the $217 million upgrade approved by the regulator on Tuesday will give the New England a head start.

With large coal power plants in the Hunter Valley set to switch off over the next decade, Mr Blakester believes it be a case of the power generation simply shifting north a few hundred kilometres.

"Renewable energy has been for some time now the biggest capital infrastructure project in the region's history," he said.

"In the way that the Hunter has the natural advantage of coal reserves underneath the ground, and our region has some of that as well, of course, we have this incredible diversity of renewable wind, solar, water resources available to us and those are the energy sources of today and tomorrow.

"Whereas coal and gas will over time be the energy sources that got us to where we are today but they'll slowly decline into the past."

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The upgrade of the interconnector will immediately create 150 new construction jobs, and will mean a boost to power substations in Armidale and Tamworth.

The job has been given the ambitious deadline of September 2021.

The project is expected to provide net benefits of $170 million to electricity customers alone.

With Tuesday's formal approval of the interconnector upgrade by the Australian Energy Regulator, on-site construction is expected to start next month.

Cr Murray agreed that cheap energy will be a "factor" in encouraging new industrial development in the Tamworth region.